New property listings surged 16% in May to the highest monthly total since July 2010, according to the Realestate.co.nz NZ Property Report.

By Benn Bathgate

The national record asking price also hit a new high of $435,887, boosted by regional highs in Auckland ($578,533) and Canterbury ($383,504).

May saw 11,544 new listings come to market and is a sign sellers are finally responding to the shortage of available property, said Realestate.co.nz chief executive Alistair Helm.

"The state of the overall property market, for the past six months at least, has been a growing shortage of supply in spite of on-going high demand," he said.

"Sellers seem to have finally heard the message, producing this unseasonal lift, and responded with confidence reflected in their price expectation."

However, Helm said the demand that has pushed Auckland and Canterbury prices up has also produced the lowest level of inventory recorded in both locations for five years - 20.6 weeks for Auckland and 20.8 weeks for Canterbury.

In spite of this, the May rise in new listings across the country eased pressure on national inventory, which rose to 35.7 weeks - still significantly below the long term average of 41 weeks.

"Some balancing of the market is clearly occurring, with several provincial regions moving away from being sellers markets. However, sellers in the main centres are overturning the myth that winter is the wrong time of year to try and sell a house," Helm said.

"Market demand is still high and shows no sign of easing over the coming months."

ASB economist Jane Turner acknowledged the May rise in listings but said it followed a sharp fall in April.

"The trend in listings remains subdued, although does appear to be lifting slightly," she said.

"Expectations of stronger selling prices may be starting to encourage potential sellers back onto the market."

Turner said the lack of housing supply would continue to generate upward pressure on prices over the coming months but noted that so far, rising prices have failed to encourage a significant increase in supply.